Service credits are best described as:

Service credits are best described as penalties related to the overall level of performance, particularly in a service level agreement (SLA). This mechanism is designed to hold the service provider accountable for failing to meet established performance metrics or service standards. When a provider does not deliver the agreed-upon level of service, they may owe the client service credits, which can be applied toward future service costs or result in a reduction of payments owed.

This approach helps ensure that service providers remain focused on maintaining high standards and fulfilling their commitments, as the financial implications can incentivize them to improve their performance. The essence of service credits is to provide a measure of recourse to clients who do not receive the expected level of service, thereby enhancing accountability within the contractual relationship.